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How Gift Aid works

Gift Aid allows charities like CAFOD to reclaim the tax on donations received from UK taxpayers.

How gift aid works for basic rate taxpayers

The basic rate of income tax is currently set at 20%.

  • Suppose you give CAFOD £10,000.

  • CAFOD is able to reclaim from HMRC (His Majesty’s Revenue and Customs) the basic rate tax you will have paid on the income you have donated to CAFOD.

  • This is calculated as 20% of £12,500 (the gross amount of your gift), ie £2,500.

  • The total that CAFOD receives is therefore your £10,000 plus £2,500 Gift Aid, ie £12,500.

Declarations can be given in writing, either by post or email, and when making a donation online.

How gift aid works for higher rate taxpayers

Gift Aid also allows higher tax rate payers to claim tax relief for themselves through their tax return, in respect of the tax they have paid over and above basic rate tax. The higher rate of tax is currently 40%.

  • Suppose you give CAFOD £10,000.

  • CAFOD reclaims Gift Aid as above, so your gift is now worth £12,500.

  • In addition, you can also claim higher rate tax relief for yourself.

  • This is calculated as 40% (the higher rate) minus 20% (basic rate) of £12,500 (your gross donation), ie £2,500.

  • So, in effect, your gift, which is worth £12,500 to CAFOD, has only cost you £7,500.

How gift aid works for top rate taxpayers

Similar considerations apply for people on the highest incomes, who pay tax at the top rate of 45%. The tax relief works in exactly the same way and reduces the net cost even further, to just £6,875.

Are you a higher-or top-rate taxpayer?

Every £10,000 you donate could be worth over £17,000 to CAFOD

There’s one more thing that higher-or top-rate taxpayers can do if they wish: namely, to donate this tax relief back to CAFOD, making their gift worth even more.

How it works

HMRC guidelines about Gift Aid

Please note: the tax consequences of your donations should be discussed with your financial adviser, as CAFOD cannot advise you on your personal circumstances.

Gift Aid declaration forms

Use this form to boost every donation you have made to CAFOD from 6 April 2018 and any donations you make in future:

Download a Gift Aid declaration

You can also download Gift Aid forms for:

Claiming Gift Aid on donations made in previous years

It is also possible for CAFOD to reclaim tax paid on donations before this tax year - providing you paid enough tax in the year in question to cover the Gift Aid on a donation for which CAFOD is making a tax claim.